The company has been family owned since its inception in 1938. In a news release announcing the deal, Diana Nelson, chairman of the Carlson board and granddaughter of founder Curt Carlson, said selling was “a difficult decision.”

“We strongly believe that selling our hotel business to HNA Tourism Group, a company that fully recognizes its value and heritage, is the best way for us to position it for success and to be true to my grandfather’s legacy in the long term,” she said.

The deal, which is expected to close in the second half of the 2016, will keep the existing Carlson executive management team and headquarters in place, according to emailed responses from Carlson CEO David Berg.

Berg said the deal arose from the Carlson board of directors’ typical review of “strategic options for its businesses including the hotels group.” The increasing pressures on the hospitality industry played a factor into the board’s decision to get out of hotels, he said.

“Hospitality is a market where the larger economics of the industry are changing by the day,” he said. “It is increasingly competitive, made even more so by peer-to-peer services and online travel providers. Hotel companies are getting larger through mergers, primarily so they can offer a wide range of brands and prices, run less-costly businesses, and invest deeply in the technology they need to thrive. The board had been watching this trend and looking for ways to build on the momentum of our hotel business given where the industry is headed.”

The two companies have already created a website dedicated to communicating guests and partners what the impacts of the deal will be. On that site, the companies are promising to make “no immediate changes” to the Club Carlson loyalty program.

On that site, the companies predict HNA plans to be “one of the 50 largest companies in the world by 2030.”

Berg said HNA’s existing presence in the travel space made HNA the most attractive among Carlson’s suitors.

HNA is expected to make investments in Carlson’s digital presence, purchasing assets in “major gateway cities,” growing Radisson Red and “other new brands.”

Berg said HNA was also the best deal for the company’s employees.

“HNA also meant the fewest negative consequences for our people in job loss or relocation,” Berg said.

In the release announcing the deal, Berg said joining HNA will give Carlson “an opportunity to advance our commitment to providing guests with hospitality worldwide.”

In that release, HNA Hospitality Group chairman and CEO Bai Haibo said the deal will “establish our presence in the U.S. market and expand our footprint in hospitality internationally.”

While the company confirmed Carlson’s Minnetonka headquarters will remain intact, company officials did not respond to a question about how autonomous the company’s U.S. operations would be following the planned acquisition.

The deal includes Carlson’s 51.3% stake in The Rezidor Hotel Group, which under Swedish law means HNA officials will have to decide whether they are willing to launch a public tender offer for the remaining 48.7% ownership stake or if they want to sell down their ownership interest to below 30%.

Berg said Carlson officials would not comment on HNA’s Rezidor decision and HNA officials did not respond to a request for comment.

Analysts reactDavid Loeb, senior research analyst and managing director for Robert W. Baird & Company, said this deal sends a very clear signal that consolidation is an active and ongoing trend within the hotel industry.

“There were really three big global consolidation plays in the last year: Starwood, Fairmont and now this,” Loeb said.

He noted that HNA is poised to be a big player in further consolidation if they chose to and already hold majority stakes in several hotel and travel companies, including pieces of NH Hotel Group, Uber and several Chinese airlines.

He said that deal is confirmation that the threats hanging over the industry are serious.

“There’s a reason for consolidation,” Loeb said. “The technology threats facing hotels are real, and scale is one way that brands can fight that.”

He said ultimately the company should be able to make some improvement with Carlson and its brands.

“This is a great opportunity for Carlson,” Loeb said. “It takes those brands away from a family business that was honestly run a bit like a family business, and it separates it from a travel agency business that didn’t necessarily help either.”

Wes Golladay, VP and equity research analyst at RBC Capital Markets, viewed the Carlson/HNA deal as a “moderate positive” for the hotel industry in general. He said it shows that Chinese capital is still active, which some feared would no longer be the case after Anbang abruptly stopped its pursuit of Starwood.

“This signals that money is still leaving China,” Golladay said. “That’s my biggest takeaway. After Anbang backed away from Starwood, there were some concerns that the government could be tightening.”

He said it’s hard to comment on the deal given no specifics were shared on price or structure, but the overall implication should be good for hoteliers because it underscores the fact the Asian investors are still seeking hotel assets. That could be particularly beneficial for companies selling assets in gateway markets, like New York City.

“You look at New York, which hasn’t been the best market performance-wise, but you can see that it is still a good market for international buyers,” he said.

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